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tv   First Business  KICU  December 3, 2013 4:00am-4:31am PST

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customer clash. a clear winner as ebay and amazon fight for consumers on the biggest cyber shopping day of the year. in today's cover story... why christmas shopping is taking a different turn this year. plus... giving back in bulk. will cash strapped american's dig deep on this give back tuesday. and why small businesses in america are doing better than you might think. first business starts now! you're watching first business: financial news, analysis, and today's investment ideas. good morning! it's tuesday, december 3rd. i'm angela miles. in today's first look: sellers step it up--- investors take some profits-- sending the dow down 77 points
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monday, the nasdaq 15 and the s&p 5. and gold fell $31 dollars. oil was the winner gaining $1.10 as manufactering data in the u.s. shows signs of growth. the detroit bankrutcy ruling is expected today. a judge will make the call on whether the case can proceed. u.s. regulators approve microsofts deal to buy nokia's mobile phone business. krispy kreme fried on forecast. the stock dropped 10% last night- investors found holes in the donut company's earnings outlook. however, profits were up 34%. lincoln ellis of green square capital is good to go for us this morning to talk about the stock market. a bit of a pullback yesterday lincoln but i'm thinking there's not too much to be concerned about going into december and january here. > >the santa claus rally is a predominant factor in the month of december and if you don't have any sellers the market does tend to drift higher. although last night we did see a lack of buyers and that brought
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us down maybe 100 basis points. > >are they worried at all about the jobs number at the end of the week? > >it is very much about the jobs number but also about the bank of england and the ecb. fed policy along with other central bank policies a big tailwind to this equity market. will it continue in 2014? > >have you been watching the play in apple? apple has been steadily climbing higher. > >they should call it basket ball. from 700 to 405 and back up to 550. a big day on friday for apple in terms of ios penetration in that market. i think apple probably gets a bit more of a push higher through the holiday season. > >those ipads are flying off store shelves. and ebay versus amazon---which etailer would you rather own? > >i think i'd rather own both. you have different demographics and different markets for each one of them. big market shares to gain in the emerging economies, particularly in china. put them both in your stocking this christmas season. > >thank you lincoln ellis. > >you bet. retailers are seeing a spike in
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"online" shopping-- but it's too soon to tell if it'll make up for the slight drop in sales over the thanksgiving weekend. our cover story looks at who's gaining in the big push of the short shopping season. shares of internet retailer e- bay advanced in trading on cyber monday-- closing at 51- 35. while amazon declined to $392-30. retailers look for online sales to hit two-billion dollars for the first time ever, capping the first wave of holiday shopping. "there's good bargains. maybe 30--35% off." the short holiday shopping season---shorter by six days including a valuable weekend led some to push cyber monday into the weekend, much as brick and morter retailers pushed black friday earlier. "inovember one started with promotions that made it seem like, "black november. but some retailers started in september." so far, it has been lukewarm start for brick and morter retailers. more people walking
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in...but according to the the national retail federation, those walking in aren't spending as much as shoppers last year. sales off about three percent, and not much time to make up the difference. "and do you think you'll spend more, less or same? about the same." so a lot of retailers are tayloring their websites with online variations of door busters. sales designed to keep shoppers coming back. "we're seeing some interesting patterns in which online retailers are acting like brick and morter stores, featuring "lightning deals" as amazon does, bascially "door-buster"- type deals popping up throughout the day.." still, retailers such as walmart and macy's do not expect holiday totals to raise their full-year sales forecasts for the year. by monday afternoon, online sales were up more than 21%, according to ibm digital analystics benchmark. retailers were expecting a 20-percent increase. amazon is enjoying heavy buzz after showing off a prototype of a new drone delivery system on "60 minutes" sunday night.
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ceo jeff bezos unveiled the concept.while he stressed it is still several years away-- the drones would be able to deliver a purchase within 30 minutes if the customer is within 10 miles of one of its distribution centers. meantime, the internet shopping giant is feeling less love from the u-s supreme court. the high court is leaving as-is a new york law that forces amazon to collect sales tax from shoppers in the big apple. around the globe-- authorities are cracking down on counterfeit goods sold online. on the heels of cyber monday, 690 websites in the u.s. and overseas have been shutdown or redirected. authorities say scammers are taking advantage of the boom in online holiday shopping by selling fake merchandise. most sites that were shutdown sold items including headphones, sports jerseys, grooming products, shoes and electronics. the healthcare dot gov website has met the obama administration's self-imposed deadline for improvements -- that's latest word from the white house. kathleen
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sebellius, the secretary of health and human services, cautions users will still encounter problems during the next several months as repairs continue. by the numbers...the white house says the troubled site is now working 90% of the time --compared to 43% in october. 375-thousand people visited the site by noon monday. the president says the site it prepared to sign up 800,000 people per day. it can handle at 50,000 users at one time. reports says 100,000 applicants were processed through the federal exchange during november. bernie madoff's former right- hand-man has turned into the star witness for the prosecution against madoff's former employees. frank di-pascali was madoff's finance chief for many years. he testified yesterday against five former co-workers. those former madoff employees have pleaded innocent and claim they were tricked by their former boss. di-pascalli tells the court- madoff's laid the ground work for his $17 billion ponzi scheme back in the 1970's at his small firm on wall street. defense attorneys are attacking di-pascalli's credibility calling him a partner in crime. bank of america is agreeing to pay $404 million to freddie
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mac...the bank is accused of selling bad loans to mortgage buying giant. the loans were sold from 2000 though 2009. mortgages and mortgage backed investments took a turn for the worse during the housing crisis. earlier this year.. b of a paid $3.6 billion to fannie mae. investigators continue to search for answers into a new york train derailment that killed four people and injured 60 others on sunday. the national transportation safety board says the commuter train was going 82 miles per hour as it entered a 30 mile per hour curve. now, investigators will attempt to determine a more specific cause as to why the train derailed in the bronx, on metro north's hudson line. when asked if the accident was caused by human error or faulty brakes, a nt-sb member said it remains unclear. lumber liquidators is already under federal investigation and now a shareholder has filed a class-action lawsuit. that florida shareholder claims company leaders made false and misleading statements about the
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source of wood imports. the national retailer of wood, cork, bamboo and laminate floors has been under federal investigation over allegations it was illegally importing wood from russia via china. dow chemical is taking the next step to revamp its business. the company plans to sell or spin off 40 of its manufacturing plants as it moves away from its commodity chemicals business. dow has already said it wants to raise one and a half billion dollars by selling off some of its business. 2,000 workers would be affected by the changes. the stock was up more than 2% on wall street yesterday. as we reported earlier in the show-- manuafacturing is picking up the pace in america. the manufacturing index compiled by the institute for supply management --- climbed to 57.3% in november, well above economists forecasts of 55. and last months reading of 56.4% in october. it is strongest data in 2 years. the ism employment index also rose to its highest level in 2 years--jumping to 56.5 from 53.2 last month.
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production is back in gear to build saab sedans...for the first first time in more than 2 years a saab 9-3 aero rolled off the factory line in sweden this week. reports say 200 cars will be delivered this spring with a price tag around $42- grand.production stopped in 20- 11, the same year the automaker filed for bankruptcy. a hong kong based company-- national electric vehicle bought saab last year. honda car company is making giant strides in helping get people back on their feet. testing in the u.s. is underway on a walking device invented by honda that is worn like a belt and controlled by a computer. it's made for stroke victims or others who have weak leg muscles but want to walk. the amazing innovation is an outgrowth of robot research and development at honda. hilton worldwide is raising the stakes. the company disclosed it hopes to raise 2.3 billion dollars in its upcoming ipo, double what it originally said
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it would raise. hilton expects to price in at between 18 to 21 dollars per share. renaissance capital reports if the hotel chain can meet its goal, the ipo would be the second biggest of 20-13, and the largest hotel ipo ever. in other ipo news... food company aramark is also plotting a public debut...hoping to price shares between 20 and 23 dollars. that stock will list on the new york stock exchange. a freeze on ipo-s in china is "thawing". for 14 months-- china has banned the sale of initial public offerings. now, regulators there are moving toward lifting the ban and making a switch to u.s. stlye rules on shares of new stock coming to market. back in 2010-- china held the title as the world's largest ipo market. olive garden is straying from soup, salad and breadsticks. the chain is adding a new burger to the menu. for now its just a lunch item, but that could change if diners indulge. darden restaurants, which owns olive garden, is reportedly trying to spice up sales, which
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have been lagging due to more competition. lords-a-leaping and maids-a- milking will set you back almost five golden rings this year. the full tab to buy your true love all the gifts in the twelve days of christmas is $27,393 -- that's a nearly 8% jump over last year's tally. the most expensive items are the swans at a thousand dollars each. the eight maids-a-milking are a relative bargain at just $58 for all of them -- that's thanks to no increase in the federal minimum wage. the tally for all the items in the song on your screen is compiled each year by pnc wealth management. still to come: bonus bump. why more employees can look forward to some extra cash flow this holiday season. plus..... waste watchers... we're checking on a favorite gift that gets trashed each year. and next...americans shopped
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till they dropped over the holiday weekend. but now, its time to give back. find out what's in store for "giving tuesday"... that's next after this in the know message.
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first comes the spending on black friday, small business saturday, and cyber monday-- now it's time for giving tuesday. joining us on set this morning-- lisa dietlin of lisa dietlin and associates-- happy to have you here.
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> >happy to be here. good morning. > >thank you for coming in. now, giving tuesday---is it gaining traction? > >i think it is. it's the 2nd year angie in existence and the idea is to have a day dedicated. a national day of giving. martin luther king day has become a national day of service. why can't we have a national day of giving? > >what are some ideas. what ranks high on your list of charitable events that might be happening today or just places to give online? > >every non-profit that i am affiliated with i tell have some sort of presence on your website. so the first place to look is---just like we did yesterday with cyber monday for the deals. go online to your favorite non-profits. if its salvation army or feeding america or the american cancer society. if those rank high on your list...or susan g. komen...then go there and see what they're doing. also, think of this as a way to involve your children. this is an activity that the whole family can be involved in. > >i'm hearing that some of the charities were ramping up last summer to prepare for now. that
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is unbelievable. did you see that? > >i did! i did. they were ramping up because last year was the first year and while a number of charities go involved, this year they are expecting more than 5 thousand were already registered before today actually began. and everyone's getting involved. to create that awareness---in the non-profit sector most people don't realize that 80% of non- profits raise 50% of their budgets in the last 2 months of the year. > >and that's because we get the tax deduction going into the next year. that is becaue we get the tax deduction, but somehow we've tied giving around the holiday season around giving back in november and december. so we are getting smarter about it and saying if that is the time everyone's going to give let's start planning earlier so that we are more strategic about it. > >any chance that the consumer is tapped out? retailers started so early this year. > >they did. i don't think so. i think giving is seen as a separate entity and most people have something in mind about what they want to do. but really it's about being smart
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about your charitable dollars, making those wise decisions, and teaching the next generation how to give back. > >always good to give back. great to have you back on our show, lisa dietlin. > >happy to be here. coming chart talk...why the brick and mortar slump is giving a boost to a hot stock on wall street. and,bonus round....why more employers are rewarding employees with a little something extra this year. that's next with bill moller.
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i'm going to pass chemistry, and i'll take it from there. i'm going to do what makes me happy. i'm going to work hard. be independent. live large. make the most of every opportunity. i knew i wanted to go to college. but figuring out how to pay for it? i didn't have a clue. the u.s. department of education has over $100 billion.
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and that's a lot of money. to help students pay for college. and the free application? you mean the fafsa. i did it online. it was easy. i'm never giving up on my goals. i will make a difference. i'm going to find out how to pay for college. i'm going to
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america's small businesses - the backbone of our economy - may be in for a surprisingly good end to the year. that's a quote from the surepayroll small business scorecard - a widely watched measure of the health of the country's small businesses. michael alter is president of surepayroll. your survey is one that tracks hiring and paychecks data. i was surprised though that you're so sanguine and optimistic because the
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numbers don't look all that healthy to me. > >well, the numbers look more of the same. a little deja vu all over again. but there are a couple numbers i think are better. one is optimism remains in the 60 percent range. which is not great but it's not horrible. > >it's 63 percent and that's relatively flat. > >that's relatively flat. i think if you look at hiring--- the average paycheck they are down .1 percent month over month so that's not so strong. but where i get a sense of optimism going into the fourth quarter has a lot to do with small business owners who are giving bonuses again. 55 percent of them versus 38 percent last year plan to give bonuses. and 80 percent of those bonuses are going to be the same or greater than what they were last year. that to me means more money available to be spent on main street. and so i think we're gonna see a bit of a rebound in small businesses because small business economy is doing a
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little better. > >so are your numbers for paychecks and hiring---are they a lagging indicator of sorts? i mean, the opposite---that the economy is strengthening but they are reporting---they are looking backwards. > >i'm judging it based on the optimism and some of the actions small business owners are taking. so i think you won't see a change in hiring until into next year. one of the things you have to remember is that small businesses this year said their number one goal was to cut costs and drive up profitability. they are clearly doing that. because their businesses are growing. one of the ways that they are doing that is that they are doing more with less. they haven't had to hire as many people. they are paying about the same in the average paycheck. so, what they are now doing is feeling a little more comfortable, a little more stable, and they're giving some of that back to their employees---the ones that they have that have worked so hard all year in bonuses. > >michael, the next step then would be to hire. that is certainly what a lot of people are waiting for. > >the next step comes as you see demand continue to drive these small businesses. i think they will remain profitable but we have to hope and what i'm hopeful for is that in the 4th quarter we're going to see a little bit more demand which is going to force them into having to hire. but we need revenues to outpace productivity. > >ok. ho ho ho. michael alter, thanks so much.
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thank you bill-- one of the "most in demand" gift this holiday season is also the "most likely" to go unused. nearly one billion dollars in gift cards go unredeemed every year-- according to research firm c-e-b tower group. it's because some cards have time limits, some retailers go out of business, or consumers lose or forget about the cards. just ahead-- how big time investors plan to make money on ebay. details after the break. don't miss it. chart talk is next.
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james ramelli of keene on the market dot com is doing some internet shopping for us today. good morning james. > >good morning. > >you have your eyes on ebay. and this is a stock that is showing a lot of activity in the options market. what are the options telling you james? > >the options market would be telling me that institutional money is getting very bullish ebay through next year. last year we saw record call volume trading in ebay. where nearly 215 thousand call contracts traded against around 21
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thousand puts. so some massively bullish institutional order flow in ebay with very large blocks of out of the money call spreads being bought. why are they coming in and making this trade in ebay now? towards the end of the year, retail data is what's in focus. consumer spending is what's in focus here. and it seems like institutional money is expecting a really good quarter for ebay. we had the black friday numbers come out. spending was actually down in brick and mortar stores year over year but online spending was up 17 percent year over year. so this should be a very good sign for ebay. taking away the price action from monday's trading session where we saw the stock get a very nice bid. ebay is one of the only 50 s%p stocks that was lower on the year. so as markets hit all time highs, investors might be coming in and looking for stocks that look cheap here. ebay looksl like it's put in a near term bottom at around $48 a share. i think it looks like a good long setup for me. > >what would be your price
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target? > >the institutional money is taking some pretty aggressive targets here. they are buying call spreads out in july with an upside target around 65. that's a huge move higher. but it does have a long time to go until expiration. we have also seen activity in february around the 50-52 half call spread lines with targets around 52 half or 55. i think that's a little more conservative and a lot more realistic and that's where i'll be placing my target as well. > >that is a bulllish call nonetheless and people are having a hard time finding stocks that have not participated in this rally. so thanks for bringing that to our attention james. > >thank you. that's it for now-- coming up tomorrow the latest sneaky fees charge by banks big and small. join us tomorrow on how to beware. from all of us at first business, thank you for watching and have a great day.
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